Former employee allegedly stole $1 billion in Intel trade secrets

Published 10:00 pm, Thursday, November 6, 2008

SAN FRANCISCO -- A former Intel Corp. engineer has been charged with stealing trade secrets worth $1 billion from the chip maker while he worked for its main rival, Advanced Micro Devices Inc.

Federal prosecutors in Massachusetts alleged this week in a five-count indictment that Biswamohan Pani, 33, illegally downloaded more than a dozen confidential documents from Intel's computer system in California during a four-day stretch in June. He already had resigned from Santa Clara, Calif.-based Intel, but remained on the payroll and still had access to the company's computers while he burned unused vacation days.

What Pani's supervisors didn't know then is that instead of taking the time to investigate a hedge fund job Pani claimed he was considering, he had actually started working for AMD and for a brief period was on both companies' payrolls.

Prosecutors say AMD had no knowledge of Pani's actions and did not benefit. But they say the information Pani downloaded was worth more than $1 billion in research and development costs and included details about methods for designing microprocessors.

The indictment alleges that Pani "planned to use this information to advance his career at AMD or elsewhere by drawing on it when the opportunity arose, whether with his employer's knowledge or not."

Pani told investigators that he had no intention of harming Intel and that he was going to give the information to his wife, who also worked for Intel.

Pani's lawyer, Brad Bailey, declined to comment on specifics of the case. He said that Pani denies the allegations and that they plan to take the case to trial.

AMD said Pani is no longer an employee. The company is cooperating with investigators.

"AMD has not been accused of wrongdoing, and the FBI has stated that there is no evidence that AMD had any involvement in or awareness of Mr. Pani's alleged actions," the Sunnyvale, Calif.-based company said in a statement.

Intel owns 80 percent of the worldwide market for microprocessors, the electronic brains of personal computers. AMD has the rest. Chip designs are among the companies' most closely guarded secrets. An Intel spokesman wouldn't comment.

Pani, who worked at an Intel facility in Hudson, Mass., had been charged with one count of theft of trade secrets in a criminal complaint filed in August in U.S. District Court in Boston. An indictment handed up to the court on Wednesday adds four new counts of wire fraud.

Pani faces a maximum of 10 years in prison if convicted for theft of trade secrets, and up to 20 years on each wire fraud charge.